A rendering of a repositioned Moorestown Mall in Moorestown, where plans call for the addition of 1,065 apartments and a hotel — Courtesy: PREIT
By Joshua Burd
The owner of a Burlington County mall is moving ahead with plans to transform the property with the addition of more than 1,000 apartments and a hotel.
PREIT, a Philadelphia-based real estate investment trust, announced last week that it has inked a rezoning agreement with local officials that will allow it to create a mixed-use, sustainable district at the Moorestown Mall along Route 38 in Moorestown. Under the first phase of the plan, the company reportedly will sell four of the property’s 84 acres to the NRP Group of Cleveland, Ohio, which will develop 365 multifamily units.
The mall owner, which is reorganizing after filing for Chapter 11 bankruptcy protection last year, detailed the proposal as part of a larger strategy for its portfolio, in a sector that has been especially hard-hit by the pandemic and the rise of e-commerce.
“Our foresight has shaped a high-quality portfolio with a strong retail core that attracts a distinctive mix of new uses to redefine the future-ready retail and leisure district, including over 3,500 apartment units that are in the final stages of entitlement,” said Joseph F. Coradino, CEO of PREIT. “The synergistic addition of apartments and hotels will benefit our existing tenants and communities by increasing visits to the property and delivering a new customer.”
All told, the company’s plans in Moorestown call for up to 1,065 multifamily units, including a 20 percent set-aside for affordable housing, and the 112,000-square-foot hotel. It will sell the initial parcel to NRP for $8 million, although it did not detail its plans for other parcels.
Day Pitney LLP attorney Craig Gianetti, who represented the REIT in the township, said he is involved in several cases involving shopping centers or obsolete offices. The goal in those efforts is to “redevelop, repurpose or reactivate the property” with some form of a residential or mixed-use component.
“A number of towns have rezoned or adopted overlay zones for shopping centers as part of its affordable housing compliance figuring the likelihood they redevelop is slim,” said Gianetti, a partner who is based in Day Pitney’s Parsippany office. “But with the changing retail market and office market, which has only accelerated during COVID-19, property owners should be looking to reposition the property and exploring such rezoning. In many instances, especially suburban towns, these shopping centers were a huge ratable and their failure could have a significant impact on municipal budgets.”
A recent report by The Courier-Post noted that the Moorestown Mall has struggled in recent years, as have other larger commercial centers. Setbacks of late include the closing of the mall’s Sears and Lord + Taylor stores.
PREIT, meantime, expects to add several thousand apartments across its portfolio through the sale of land to multifamily developers, which it expects will generate more than $150 million in proceeds, the company said. It will use the funds as a new liquidity source and to reduce debt.